Sir Christopher Kelly, author of the review, said: “This report tells a sorry story of failings in management and governance on many levels.”

The former Treasury mandarin was asked to investigate after the bank was found to have a £1.billion hole in its balance sheet.

His long-awaited report found “overwhelming” evidence that Britannia chief executive Neville Richardson, who took over as boss following the 2009 merger, failed to leave the new business “in a good position” when he departed in 2011.

It also said the culture of the bank was partly to blame, with a “willingness to accept poor performance” and a “tendency not to welcome challenge”.

The board of the wider Co-operative Group, led at the time by Peter Marks, also came in for criticism for failing properly to oversee the bank and badly letting down the group’s millions of members.

Sir Christopher said: “The roots of the shortfall lie in a merger between the bank and the Britannia building society which should probably never have happened. Both organisations had problems. Bringing them together exacerbated those problems. It might have worked if the merged organisation had first class leadership. Sadly it did not.”

In response, current Co-op Bank chief executive Niall Booker apologised for “past failings” and said it had been “working diligently” to address them.

The bank is appointing new auditors, Ernst & Young, ending a 40-year relationship with KPMG.